The Expensewatch deal is the first example I've come across of a venture-funded company being bought out by private equity this early in its development. Private equity is more usually associated with buyouts of mature businesses (ERP roll-up Infor is private-equity funded and there have even been rumors of a private equity buyer wanting to buy up shares of SAP).

Of course this deal involves a special kind of private equity — effectively the personal fortune of Jeff Bezos, who already had a majority stake in the business. But it's the first reported full buyout by Bezos' firm, which holds stakes in a number of other well-known startups, including Basecamp developer and Ruby on Rails creator 37signals, and Second Life creator Linden Labs. In a press release, Bezos Expeditions' chief investment officer Stephen Campbell said "we see significant opportunities for growth in this market," but there was no further explanation of why the firm felt a complete buyout was preferable to a more conventional VC round. The value and terms of the deal were not disclosed.

Xactly's C round is a more conventional affair, but still notable both for its size and also for the circumstances surrounding it. CEO Chris Cabrera told me last week that he had rapidly found himself in the enviable position of having five term sheets to choose from. The way he tells it, VCs were effectively lining up for the opportunity to invest in Xactly. That implies that the extra money has been raised with very little equity dilution, and puts Xactly on a firm footing to ride out whatever challenges it encounters as it embarks on a new phase of expansion. Cabrera said the round is twice what the company believes it needs to get to profitability.

In terms of customers, user numbers and growth rates, the two companies are a similar size and it will be interesting to compare their future development. Both deals are symptomatic of an eagerness to invest in successful SaaS vendors, which is heartening news for all of the industry's entrepreneurs.

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant. He founded pioneering website ASPnews.com, and later Loosely Coupled, which covered enterprise adoption of web services and SOA. As CEO of strategic consulting group Procullux Ventures, he has developed an evaluation framework t...
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Phil Wainewright's work as an independent consultant brings him into direct or indirect business relationships with several of the companies that he writes about, or their competitors. Phil is committed to maintaining the independent and opinionated stance that his writings are well known for and does not enter into contracts that would limit his freedom of expression in any way. However it is important in the interests of full disclosure to inform readers of those relationships so they can form their own judgement. ggRead the complete list of Phil's relationships.